Question
I have signed up several times for mileage cards. I get the card, pay the fee, get the miles, and close the account. My question is, does this kind of activity have a negative effect on my credit score?
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I have signed up several times for mileage cards. I get the card, pay the fee, get the miles, and close the account. My question is, does this kind of activity have a negative effect on my credit score?
from the website myfico.com:
Fallacy: My score will drop if I apply for new credit.
Fact: If it does, it probably won't drop much. If you apply for several credit cards within a short period of time, multiple requests for your credit report information (called "inquiries") will appear on your report. Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on the credit score.
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I have signed up several times for mileage cards. I get the card, pay the fee, get the miles, and close the account. My question is, does this kind of activity have a negative effect on my credit score?
The answer is probably yes, but it may not be a huge hit. A better forum in which to post this question is creditboards.com (http://www.creditboards.com/phpBB2/viewforum.php?f=2).
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I have signed up several times for mileage cards. I get the card, pay the fee, get the miles, and close the account. My question is, does this kind of activity have a negative effect on my credit score?
I have 7 credit cards that obtain various frequent flier miles, and my credit score is almost perfect, for I have never made a late payment and always pay my balance in full.
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I have 7 credit cards that obtain various frequent flier miles, and my credit score is almost perfect, for I have never made a late payment and always pay my balance in full.
This is the way to do it!
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i also have several cards but am unaware of my credit score potentially being affected...how do I find out if there's been a negative impact ?
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i also have several cards but am unaware of my credit score potentially being affected...how do I find out if there's been a negative impact ?
Go to MyFICO.com and pay the money and find out.
What can potentially affect the FICO score is the the length of time you have had credit w/ a company. In other words, you change credit cards every year. It's why I have a Visa I have had forever... just for that purpose.
If you are 750 or above, it won't hurt you much because that's the top tier of creditworthiness. Below that, it becomes harder to judge... because they don't release how they actually figure out your FICO score to begin with!
Answer
multiple inqs for credit cards are -not- treated as a single inq as listed above; that only applies to auto loans and mortage loan inqs over a short time period(2 weeks, maybe 4, if memory serves).
Since more than 2 inqs will start dropping your fico score(usually 2-3 points per inq), you would be wise to check your scores for each credit bureau at myfico.com before you start opening zillions of card accounts.
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Opening and closing a lot of accounts (churning) can have a negative effect on your score. For one, it significantly decreases the average age of your accounts, which makes you look like more of a risk.
It also means there are a lot of inquiries on your account - another negative factor.
Go to MyFICO.com and pay the money and find out.
...
If you are 750 or above, it won't hurt you much because that's the top tier of creditworthiness. Below that, it becomes harder to judge... because they don't release how they actually figure out your FICO score to begin with!
But if you buy your score, they will tell you the top positive and negative factors that are affecting your score, so you can get some idea.
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I was told by a MBNA credit analyst that it will not look good on my credit report if I apply for 5 or 6 credit cards a year, but one or two is fine.
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Instead of closing them (assuming you do it almost immediately), keep it open until the next renewal period, but have your credit line reduced. It's not necessarily the number of credit cards you have, but rather the amount of available credit you have. Once the renewal comes due (assuming there's an annual fee), then cancel it, at least then you would have had the card for close to a year, which will look better than 1-3 months.
Jeff
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In Frebruary my credit score was 714.
Since February I have applied for and received the following:
5 UA Visa cards with the 20,000 mile bonus:)
1 HH Amex
2 PC Visa cards
1 AA Master Card
2 NW Visa cards
1 AS Visa
As of July my credit score was 720. I'll check again today and report back if there is a major change, which I doubt.
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This thread (http://www.flyertalk.com/forum/showthread.php?t=9327&highlight=Credit+Card) has lot's of good info about credit scores.
I also checked my credit score today, its 745.
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In Frebruary my credit score was 714.
Since February I have applied for and received the following:
5 UA Visa cards with the 20,000 mile bonus:)
1 HH Amex
2 PC Visa cards
1 AA Master Card
2 NW Visa cards
1 AS Visa
As of July my credit score was 720. I'll check again today and report back if there is a major change, which I doubt.
How were you able to apply for 5 UA Visa with the 20,000 miles? You can only apply once for every 90 days.
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How were you able to apply for 5 UA Visa with the 20,000 miles? You can only apply once for every 90 days.
I was just going to ask the same question. You should have only been able to get 3 at the MOST between Feb and Sept. since you can only get one card every 90 days.
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For the first two months I applied to one every two weeks (4 total) and they kicked out the second and fourth applications as "duplicates." Then I applied for one every month. (I'm still doing applying for these too)
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I always find the discussion of good score vs. bad score interesting. The main consequence of having a less than perfect score seems to be a hurt ego.
If you don't foresee needing a very large, traditional loan in the near future, then the debate just isn't that important. And, even if you do, a local credit union or bank can work with you to make it work when you need it.
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I always find the discussion of good score vs. bad score interesting. The main consequence of having a less than perfect score seems to be a hurt ego.
If you don't foresee needing a very large, traditional loan in the near future, then the debate just isn't that important.
In the US, not sure about Canada, a person's car and homeowners insurance premiums are also based on their credit score. Many people disagree with this but it is the one of the factors that insurance rates are based on.
North America is rapidly moving towards a cashless market and with this I think we'll see more and more parts of our life based on our credit score. It’s one of the few ways left to legally discriminate.
And, even if you do, a local credit union or bank can work with you to make it work when you need it.
Credit Unions are moving towards the true bank model more and more every day. There is even pending legislation in the US Congress that will modify their 501c3 status, though admittedly its not receiving much attention right now. As they expand their charters and get bigger and bigger and therefore compete with the banks more directly that will happen. I’d bet that there are only a handful of credit unions that operate today on a good will basis.
After all that, a credit score can be a ego issue, but it is more important then it ever has been in the past.